Stateline New South Wales

Mr Fix-it?

QUENTIN DEMPSTER: During the recent state election campaign, Premier Morris Iemma apologised for having let the public down on service delivery, particularly public transport.

"There's more to do, we're moving in the right direction" was the Labor Party's apologetic slogan.

Sometimes known as Mr fix-it, Treasurer Michael Costa's second Budget returns the State to substantial debt financing for infrastructure investment, electricity ports, roads, hospitals and transport.

There's $50 billion of it over the next four years.

Through an upturn in economic growth, Mr Costa has been able to turn the '06-'07 deficit into a surplus.

Needless to say, the Treasurer seemed pleased with himself.

But with all this good news, Stateline still wanted to know when will services improve.

QUENTIN DEMPSTER: Mr Costa, in the recent election campaign, the Premier apologised for letting the public down, particularly on public transport.

By what percentage will these Budget initiatives lift patronage on public transport in NSW buses and trains?

MICHAEL COSTA: There's a projection to restore historic levels of growth in terms of public transport. This's part of the state plan. This Budget reinforces that by significant investment.

QUENTIN DEMPSTER: Why isn't it in the Budget papers? You say, these are the initiatives according to the State plan, we've got to lift patronage on public transport. Why isn't it there? You've said this is a boring set of accounts, it is just an accountancy exercise, but if you really want to get a meet your commitments to public of NSW, which is what you said you'd do in the election campaign, why isn't it benchmarked in the Budget paper?

MICHAEL COSTA: It's there in terms of increased funding.

QUENTIN DEMPSTER: You can't answer my question on what level of patron age will increase on public transport?

MICHAEL COSTA: That's in the state plan. They're talking about a one to two per cent...

QUENTIN DEMPSTER: It's not in your head?

MICHAEL COSTA: I can tell you the figure. It's not in the Budget. We have never formed budgets that way. If you want us to change accounting standards to suit your program, that's good. But I don't intend to do that.

MICHAEL COSTA: Mr Speaker, it's privilege to be back deliver ing the first budget of the re elected Iemma Government.

The reality is we turned around a deficit.

QUENTIN DEMPSTER: Yes, they did. By extracting $300 million in savings and through an up turn in some sections of the property market.

If your livelihood, business or investment return is dependent on or impacted by the property market, listen to this explanation of Treasurer Costa's strategy on modest land tax cuts and the early abolition of mortgage duty.

It might also explain why the Government appear s so develop er friendly.

MICHAEL COSTA: The real issue for issue the property market. Given that our revenues are so dependent on the property market, we need to make sure that that market operates with as much support as a government can possible give.

That is the reason for the targeting of the tax cuts in that area.

QUENTIN DEMPSTER: So hats off to property. It remains a State revenue gravy train.

Purchaser transfer duty on property was Budgeted to gather $3.2 billion but in fact delivered up $4 billion 2006-07.

Land tax was budgeted to gather $1.7 billion but cracked just over $2 billion.

This upturn in property revenues helped get the Iemma Government out of its deficit hole.

The property lobby and the Government have now formed a mutual admiration society, it seems.

KEN MORRISON, PROPERTY COUNCIL: We have the land tax rate being cut to from 1.7 per cent to 1.6 per cent. That now gives NSW a most competitive land tax rate in the country and land tax system in the country.

So we congratulate the NSW Government on achieving that target.

QUENTIN DEMPSTER: if you're a nurse, teacher, police officer, or public servant, concerned about maintaining the value of your wages, listen to this exchange on the Treasurer's declaration that any further wage increase must be contained to only 2.5 per cent a year.

MICHAEL COSTA: We've lifted real wages in the public sector over the last period.

In fact I read analysis in all the newspapers criticising us for not controlling public sector wages.

What we say to you is we had no choice. The reality was our teachers, nurses and police needed pay rises. We lifted their rates of pay.

I believe and the Government believes that their pay rates now are world class. They certainly are the highest in the nation and our commitment to them is to maintain the real value of those wage increases.

If there are to be increases beyond that, certainly we will need to sit down with the relevant unions, the relevant government departments and look at some efficiency or productivity offsets.

It changes the front-line services mix, lifting health to 28 per cent of the total Budget expenditure to meet the demands of an ageing population.

Although reasonable debt level s won't threaten the State's AAA rating and many commentators called it catch-up, after years of Carr-Egan "neglect", Tony Harris, writing for the Australian 'Financial Review' said:

"The main issue holding back NSW's economy is the lack of substantial micro-economic reform over the past dozen years under Labor. Until we see the Iemma government embarking on substantial reform, the state will continue to be a disappointment to its residents and a drag on the rest of Australia. This reveals the main disappointment about Costa's post-election budget. It has no sign of substantial reform. It's tidy, disciplined and effete."

GLADYS BEREJIKLIAN: Numerous examples in the Budget. The integrated electronic ticketing system or e-card. This was meant to be delivered in the year 2000. The budget papers reveal that yet again, this is delayed yet another year.

Another example is the outer suburb train carriages. The Budget papers confirm they will be Adelaide another two years, which means many people travelling from Sydney to the Central Coast, to the South Coast won't have the extra carriages.

The Government had promised to deliver 600 non-air conditioned carriages by a certain year in 2011.That's been pushed out another two years. There's a number of examples in public transport where this has been occurring.

QUENTIN DEMPSTER: The north-west / south-west rail corridor?

GLADYS BEREJIKLIAN: The north-west rail link was announced in 1998 but the Budget paper doesn't offer any funding beyond feasibility studies and planning or land acquisition. So after the 10 years the State Government still hasn't committed any costings on future expenditure on actually building the rail link.

MICHAEL COSTA: This Budget provides increased funding in transport. There is no doubt about that. The bulk of that capital program, the most significant item has been transport. 600-plus air conditioning rolling stock, outer suburban carriages...

QUENTIN DEMPSTER: But it's a question of when they're going to be delivered.

MICHAEL COSTA: Well, they've got to be built. If the Opposition can produce rail carriages without going through the normal building process, they're obviously magicians.

QUENTIN DEMPSTER: But it's a two-year delay. It's 2013 now.

MICHAEL COSTA: We are funding it. The Budget funds those improvements. Whether it delays or not that's the nature of delivering capital works.

QUENTIN DEMPSTER: It goes to your credibility.

MICHAEL COSTA: The credibility is we have managed to eliminate a Budget deficit, increase funding for capital works and at the same time ensure that our AAA credit rating remains in tact.

We have also paid down some debt and the Opposition's playing games. They know full well the reason the expenditure is down in some areas is we've paid off $1 billion worth of capital debt in the area of the Chatswood-Epping rail line.

They're fudging figures. There is no question at all that this Budget provides significant amounts for public transport.

QUENTIN DEMPSTER: New Opposition Leader Barry O'Farrell says he will be trying to hold the Government to account on each of its commitments with each budget over the next four years.

BARRY O'FARRELL: The return to surplus is welcome as is the direction of funds towards infrastructure.

But what never happens under this Government, why there's scepticism, is their failure to deliver.

I refer to Michael Costa today as Rumpelstiltskin-like, spinning gold out of straw.

The problem is for 12 years Labor spin has turned NSW gold into straw and we have so little to show for it in terms of infrastructure or services.

QUENTIN DEMPSTER: Because commuters and public hospital patients always seem to be left in the lurch

BARRY O'FARRELL: Commuters, public hospital airports, carers... across the board there have been repeated promises to deliver improvements. Those improvements haven't materialised.

Whether it's traffic and transport in Sydney, whether it's water supply in country, whether it's roads in regional areas, each time promises have been made they've not materialise hand that's despite a background of record revenue, strong growth...